Devil's Advocate 

Don’t Get Married

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This is a Devil's Advocate post.

Marriage is nice in principle but when it comes down to the dollars and cents, is it really truly worth it? According to some statistics in Rebecca Mead’s new book One Perfect Day: The Selling of the American Wedding (tip of the hat to Freakonomics blog), the average cost of a wedding is $27,852. Compare that to the median income in 2005 of $46,326 (Wikipedia) and you’ll wonder where people find the cash to pay for their weddings, let alone the financial pain brought on by the government.

The Marriage Tax
Let’s say you make $60,000 and the love of your life makes $60,000 too. If you remained unmarried, your couple’s total tax owed is $22,847.50 ($11,423.75 each) not counting any deductions. If you were to get married, you would owe $22,847.50 as well; being married doesn’t hurt right? What if you made $90,000 and the love of your life made $90,000? As single filers, you’d pay a combined $38621.50 in tax. As two happily single but committed persons, you’d pay $38,621.50 ($19,310.75 each); $39,392.50 if you were married, a difference of $771. As you make more and more money, the difference becomes more acute. So, either don’t get married, or don’t make a lot of money… a fair decision for someone to have to make right?

Here are the tax tables for a reference:

Tax Rate Married Filing Jointly Single
10% $0 to $15,650 $0 to $7,825
15% $15,650 to $63,700 $7,825 to $31,850
25% $63,700 to $128,500 $31,850 to $77,100
28% $128,500 to $195,850 $77,100 to $160,850
33% $195,850 to $349,700 $160,850 to $349,700
35% $349,700 to infinity $349,700 to infinity

(full marginal tax tables)

Weddings Are Expensive
I mentioned it before but the average wedding is somewhere in the $25-$28k range, which is about a down payment on a house in most areas. While everyone loves a party and loves the celebration, the sheer expense of it all almost makes you want to elope or hit up Vegas, doesn’t it? Not only are weddings expensive, they’re often stressful as you want your wedding day to be perfect. That means the food must be good, the drink must be good, the guests must be happy, the ceremony must go off without a hitch, the rings can’t get lost, the weather can’t turn sour, the reception hall can’t lose electricity, and so on and so forth. Considering how little of that you can actually control, it makes for quite a stressful day doesn’t it? Oh, and it’ll cost you a pretty penny or two (million).

You Lose Half Your Stuff
From now on everything you earn, you only get half (and that’s the half after the tax man takes his cut, which gets bigger and bigger with every dollar). If things don’t work out, he or she gets to keep half of it if you walk away for the always popular “irreconcilable differences” excuse. Yuck!

So the moral of today’s story is: don’t get married. Oh, and I’m preparing myself for the beat down that is likely going to occur at the hands of my lovely, brilliant, special, wonderful, and most-important-person-in-my-life fiancee once she reads this… but remember, Devil’s Advocate means that most people don’t agree (including myself, especially in this case!) and I was just trying to find a way to argue the other side. I’m still getting married. I hope. 🙂

 Monthly Review 

October ‘06 Net Worth Monthly Review

It’s been a long long time since I’ve written one of these reviews (back in May is my last one) so those of you who have been patiently waiting for one of these can finally rejoice, it’s here. Some personal finance bloggers give you brutally and painfully detailed account information, I just give the roll up information and then look back at what I did wrong, what I did right, and any other big changes.

All the gory details are after the jump.

Net Worth: $146,886.30
Retirement Assets: $67,501.11

Normally there are percentages next to those number, they’ll return next month.

Here are some things of note that have changed in my financial picture since I last wrote one of these:

  • I’m engaged. While the numbers above partially reflect some of my fiancée’s assets and liabilities, they don’t reflect all of them. In fact, the only financials on her side that are counted are those that we share in a joint bank account where we both direct deposit our paychecks but that hasn’t been significant since we’ve only had about a month of paychecks deposited in there so far.
  • I switched jobs. Hopefully my net worth growth curve will be elevated with the increase income but it also experienced a slight blip as a result of my former employer paying me for two and a half weeks of vacation. That temporary blip will be very temporary as I’ve already put that away for my new windows and doors.
  • I paid off one 0% balance transfer. It was the Citi mtvU card, a 6 month offer, that got paid off. After all these 0% balance transfer deals expire, I’ll probably stop doing them. While it’s taken only a small amount of time, there is a lot of hassle involved and I’ve gotten too busy as my new job to really have the energy to stay on top of these.
  • Opened Up A Vanguard Account For Extra Savings. My fiancée opened up a Vanguard mutual fund account (we put it in her name since she’ll be in a lower tax bracket and we aren’t yet married) and we’ve deposited $5,000 into it and put it with an index fund, this will be the first time any one of us has invested money in the market outside of a retirement account (401k or Roth).

Some thoughts on my mind:

  • Rolling over my 401(k). I was looking at the fees on my former employer’s 401(k) plan funds and most of them were under 0.7% with the exception of the Emerging Markets fund which had a whopping 1.5% fee. While Emerging Markets had performed quite well for me, I am debating whether or not I should just push my 401(k) to a Vanguard IRA and put it in a Target Retirement fund.
  • Business Income. This blog has been incredible, all of the folks who read it are incredible, and I’ve been lucky to make even a penny off just writing my thoughts on money. That being said, I have no idea what I should do with this extra income. Right now it just gets lumped into my bank accounts and pretty much disappears into the numbers (with the mental note that we’re probably saving it for the wedding) but I’d like to earmark it for something bigger after we’ve saved enough for the wedding. I’ve thought about using it as a down payment on a rental property but I think I need to research that a little bit more before I do anything drastic.
  • Budgeting Daily Expenses and Being More Frugal. I’ve been really really lax on this the last year or so. Part of that was because I was over-diligent before I bought the house and I may have been burned out because of it, keeping track of expenses pretty much sucks honestly, but you have to do things you don’t like to do in order to achieve the goals you want to achieve. Another part of the reason was that this blog started to earn money and I saw that money as “free.” I wasn’t really “working” for it and so any excess spending I had would be covered by this income… that’s a bad strategy, it’s a lazy and irresponsible strategy, so I’m going to change it.

Well, that’s that, tune in next month to see how things have progressed and if you have any advice, as always, I welcome it with open arms.


The Pros Wedding Services Not Reliable

I spent a fun weekend fishing, seeing my parents, and, oh yeah, attended a beautiful wedding. Two of my college friends became one and I can safely say that everyone thoroughly enjoyed themselves and that it was a great time. The ceremony was beautiful, the reception was a lot of fun, and the cake was delicious. (Actually everything was delicious, I think I gained ten pounds between all the alcohol and the food) The only blemish on the night, not for me personally, was the absence of the videographer, from “The Pros,” who didn’t show up at all. At all.

(Click to continue reading…)

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